A case for liberalism

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

A case for liberalism

At a time when politicians are universally despised, allow me to recall one who is a towering inspiration, the greatest ever, who offers valuable lessons to our own morally and intellectually bankrupt netas.

Sir Robert ‘Bobby’ Peel (1788-1859) was the first liberal politician in the world. He stands tall in history for three unprecedented policy measures he undertook as Britain’s prime minister. First was free trade: by repealing the ‘Corn Laws’ that prohibited imports of wheat into Britain, he made bread cheap for the working classes. Thanks to Peel, Britain prospered through unilateral free trade, which continued right up to WWI.

Second, through his ‘Peel’s Act of 1844’, which forced the Bank of England to redeem its notes in gold, he attempted to usher in ‘sound money’.

Third, Peel took an important step towards a rule of law society by creating the first-ever police force in the world, the unarmed ‘Bobby’ of London (named after him), a loyal friend of the citizen and an unrelenting enemy of crime. These ideas – free trade, sound money and the rule of law – still remain central to the liberal agenda, and in Britain were espoused by every liberal statesman that followed Peel, from Gladstone to Thatcher.

What is remarkable about Peel – and in this he is radically different from the heirs of our Congress dynasty – is that he moved away from the Tory statism of his father. Sir Robert Peel the Elder had dedicated his first-born to politics hoping he would carry forth his ideas, which demanded a huge role for the state. But the young Robert developed into a classical liberal as a result of his own intellectual convictions. Historians credit his change of heart to his tutor at Oxford, Edward Copleston. Thus, while his father had supported war, he preferred trade; and while his father had supported the notion that government debt leads to national prosperity, he pruned the debt and upheld sound currency.

Classical liberal ideas did not remain isolated in Britain. They came to India through the Indian Civil Service. A detailed study by the late Professor Ambirajan has proved that the ICS was steeped in classical liberalism and made every sincere attempt to set up, in India, the minimalist state that liberalism prescribed. Thus, under the ICS, we had free trade, free enterprise, sound money (which Nehru inherited but destroyed) and basic law and order. The ICS intervened in setting up public works like roads and canals (as Adam Smith had prescribed) and never ever contemplated the sort of ‘maximalist state’ that independent India came to be burdened with, thanks to Nehru. The ICS did very few things, but did them well, and were therefore admired and respected. The socialist IAS attempted too many things and failed in all of them, hence they are the butt of ridicule today.

If the IAS needs an example of a truly liberal civil servant in our own times, the career of Sir John Cowptherwaite in colonial Hong Kong stands out proud and tall. He was sent to Hong Kong immediately after WWII, and the colony then was not only extremely poor, but swamped with refugees. The Labour (socialist) government back home had instructed him to use his powers to alleviate the sufferings of the poor, but he unilaterally decided to follow a policy best called ‘benign neglect’. In his memoirs he recalled that upon arrival in Hong Kong he found that ‘‘the poor were getting along quite well without me’’; this convinced him that all he needed to do, as the state, was not get in their way. Without any WTO, Hong Kong embraced free trade unilaterally: zero import duties.

Cowptherwaite kept taxes low (a flat 15 per cent) so that the people could keep the money they earned and re-invest it. He refused to set up a central bank, opting for a currency board instead, so that two private banks issued the Hong Kong dollar, which was always convertible at a fixed rate against the US dollar: sound money. Paperwork to set up a new business took just 15 minutes! Yes, he built roads, set up an effective police and judicial system – but that is all he did. Thus, even with very low taxes, he always ran a budget surplus. Indeed, he even refused to set up a statistical bureau on the grounds that these statistics may be (mis)used by some ‘planners’ who may succeed him in the future. By the time he retired, the slums had all been replaced by high-rises; and the colony had a per capita ownership of Rolls-Royce cars higher than the colonial master. Capitalist Hong Kong was richer than socialist Britain!

On his departure, he was asked by The Far Eastern Economic Review as to the reasons for his success. His reply: ‘‘I did not do much. All I did was to ensure that whatever I did could not be undone.’’ So when Communist China took over, they had to contend with ‘‘One Country, Two Systems’’. Hong Kong’s free-wheeling capitalism, entrenched by

Cowptherwaite, can never be undone. Cowptherwaite recently passed away, and his obituaries recalled that he is the only bureaucrat ever to have been praised by an arch-liberal like Milton Friedman.

While India awaits a PM like Peel, we could easily have many administrators like Cowptherwaite. Liberalism at the district level requires a DM-SP combination that takes local politicians into confidence and refuses to enforce illiberal laws, thereby keeping the market free. Predation by the constabulary on street hawkers can be ended locally. District administrators can exercise independent judgement, and they must. Thus, even if the constitution does not recognise property rights, district governments can do so. As islands of freedom and prosperity mushroom, they will be living testimony to the truths of liberalism. Then, perhaps, our own Peel will arise. Anyone inspired?

The author teaches liberal philosophy at the Centre for Civil Society, New Delhi, and can be contacted at naturalorder@gmail.com